The trap behind the new minimum wage from July 1. Economics professor: 'It is almost a certainty what will happen to prices'

Romania has raised its gross minimum wage by 6.8%, an increase of 275 lei, bringing the national minimum wage to 4,325 lei per month as of July 1, 2026. This adjustment is expected to result in approximately 125 lei more in take-home pay for many workers.

The Ministry of Labor reported that over 831,000 employees were earning the gross minimum wage as of March 2026. Officials now estimate that the new policy will have a broader impact, potentially affecting around 1.76 million workers across Romania. This significant increase influences not only the income of those at the minimum wage level but also affects the broader labor market and could contribute to inflation.

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The idea is, fundamentally, the following. In Romania, the minimum wage is a kind of reference point to which many other salaries are related. Not all, but many.

Christian Năsulea, a professor of global economics, explained the implications of this decision, cautioning that while the wage hike benefits employees, it also presents risks for companies and price dynamics. He highlighted that the minimum wage in Romania acts as a reference point for many other salaries, not just for those directly paid at that level. "The idea is, fundamentally, the following. In Romania, the minimum wage is a kind of reference point to which many other salaries are related. Not all, but many," Năsulea stated.

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Even if there is no clear rule or law that says things must work this way, this is a phenomenon that occurs naturally in any market where there is a minimum wage.

He elaborated that this reference point is particularly influential in the public sector, where salaries are often pegged to or significantly influenced by the minimum wage. This benchmark also tends to affect private sector wage adjustments through comparison, even without explicit legal mandates. "Even if there is no clear rule or law that says things must work this way, this is a phenomenon that occurs naturally in any market where there is a minimum wage," he added.

Năsulea also pointed out that the impact on companies varies depending on their sector and profit margins. In industries with high operating costs or where labor can be easily replaced by technology, businesses might accelerate automation. "For this reason, there are employers and employees who will be affected by this increase in the minimum wage in various ways. The effects can range from a simple salary increase, without other consequences, to situations where, in certain sectors with small profit margins or where work can be relatively easily replaced by robots, artificial intelligence...", he explained, indicating potential shifts towards technological solutions.

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For this reason, there are employers and employees who will be affected by this increase in the minimum wage in various ways. The effects can range from a simple salary increase, without other consequences, to situations where, in certain sectors with small profit margins or where work can be relatively easily replaced by robots, artificial intelligence...